Pinduoduo Inc Cl A Ads
Pinduoduo Inc Cl A Ads
IBD Stock Analysis
- Shares broke out from a handle within a consolidation at 93.29 buy point
- Now approaching secondary buy point of 99.06
- Pinduoduo has 96 Relative Strength Rating, 91 Composite Rating
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:54PM EDT on
Pinduoduo (PDD) is the IBD Stock Of The Day, a unique Chinese e-commerce company that combines social networking with group shopping. Pinduoduo stock approached a record high and buy point on Thursday.
In afternoon trading on the stock market today, Pinduoduo stock climbed 4.7%, near 94.20. It hit an all-time high of 98.96 on July 6. Pinduoduo stock has been consolidating for the past 17 weeks with a buy point of 99.06.
Keep in mind the sharp reversal in stock markets this week makes buying stocks a risky pursuit at this time. Investor’s Business Daily on Monday changed its market direction outlook to “uptrend under pressure.”
This would be a good time to review sell rules, an exit strategy that can help limit your losses. The IBD CAN SLIM method of investing says limit losses to no more than 7% or 8% from your purchase price.
Pinduoduo Platform A ‘Virtual Bazaar’
Pinduoduo says it consciously built its e-commerce platform to resemble a “virtual bazaar.” Buyers browse and explore a full spectrum of products while interacting with one another. Moreover, it places an emphasis on group purchases.
Using Pinduoduo, buyers can share product information on popular social networks and invite their friends, family and social contacts to purchase together. Through bulk purchasing consumers achieve economies of scale that can lower costs.
Pinduoduo once described its business model as “Costco meets Disneyland.”
The company’s e-commerce platform offers a wide range of products, including apparel and shoes, products for moms, furniture, household goods and electronics. It also sells food and beverages.
In mid-August, Pinduoduo reported mixed second-quarter results. Revenue jumped 67% to $1.73 billion, slightly below estimates. It reported an adjusted loss of 1 cent per share. Wall Street expected a loss of 21 cents.
Gross merchandise volume jumped 79% to $179.6 billion. It ended the quarter with 568.8 million monthly active users, up 55%.
Pinduoduo has yet to show a profit. Wall Street analysts currently estimate Pinduoduo won’t show a profit until mid-2021.
Pinduoduo Stock IPO A Winner
The company held its initial public offering in July 2018, pricing shares at 19 and raising $1.6 billion. Pinduoduo stock jumped 41% on its first day of trading.
Backers of Pinduoduo include China-based Tencent Holdings (TCEHY), a leader in messaging, mobile payments and mobile gaming in China. Tencent supports Pinduoduo with services such as payment solutions, cloud services and user engagement via Tencent’s WeChat mobile platform.
Tencent was the IBD Stock Of The Day on Tuesday.
A big positive for Pinduoduo stock is that its relative strength line is at a record high. The relative strength line measures a stock’s price performance vs. the S&P 500. Typically, the RS line of the strongest stocks is either confirming or leading a stock’s price into new high ground.
Pinduoduo Stock Shows Healthy Ratings
Among other stock metrics, according to the IBD Stock Checkup, Pinduoduo has a healthy Relative Strength Rating of 96 out of a possible 99. The rating tracks market leadership by showing how a stock’s price movement over the last 52 weeks measures up against that of other stocks.
It has an IBD Composite Rating, of 91 out of 99. The rating means Pinduoduo stock currently outperforms 91% of all stocks in terms of the most important fundamental and technical stock-picking criteria.
Oppenheimer analyst Bo Pei on Monday initiated coverage on Pinduoduo stock with a rating of outperform and price target of 100.
Alibaba stock edge up 1%, near 311.35, on Thursday. JD.com stock climbed 3.8%, near 83.10. Tencent stock rose 3%, near 78.25.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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